TSX: FM; LSE: FQM Cautio tionar nary y Note e Regar arding ing - - PowerPoint PPT Presentation

TSX: FM; LSE: FQM

2

Cautio tionar nary y Note e Regar arding ing Forwar ard-Looking Looking Stat atemen ement Some Some of

• f the

the stat statemen ments ts con contain tained ed in in the the foll

• llowing

wing mat material rial are are for

• rwar

ard-loo looking king st stat atements ments and and no not st statement ment of

• f facts
• acts. Su

Such st statemen ements ts are are base based on

• n the

the cu curr rren ent be beliefs liefs of

• f managemen

management, t, as as well ell as as ass assum umpt ptions ions based based on

• n managemen

management informat

• rmation

ion curre urrently ntly available lable. For

• rwar

ard-looking looking st statements ments are are sub subject ject to to various arious risks, risks, uncer ncerta taintie inties and and other ther fact actor

• rs that

that co could uld cause ause actual ctual re results sults to to differ er materi erially ally from expect pected ed results sults. Reader ders must st rely on

• n their

ir own evaluation ation of

• f these

se uncertain tainti ties es.

Note: all dollar amounts in US dollars unless otherwise indicated

3

First st Quantum ntum Minerals rals – At a Glance ce

• A Glob
• bal

al Compan any – Operations and projects in 8 countries

• High-Quality

Quality, Stabl able, e, Effici icien ent t Operat ation ions – 7 operations – 2013 production:

• copper 412,281 tonnes
• nickel 47,066 tonnes
• gold 248,078 ounces

– Cash cost of production

• copper $1.30/lb; nickel $5.02/lb
• Strong

g Li Liquidi dity ty & Cash sh Flow – Cash at Dec 31 ‘13 = $694.5M – Cash from operations = $1.4B – Two five-year facilities

• $1.0B term loan; $1.5B revolver; Libor + 2.75%

– Two $1.14B Notes

• 6.75% due 2020; 7.00% due 2021
• Industr

ustry-Lea eadi ding ng Growth – 5 major projects under development – Production capacities to rise to 1.1 Mtpa for copper and 110 ktpa for nickel by 2018

• Un

Unique ue Core Strength gth – In-house project development team – Delivered projects at an average of 40%

• f the industry’s average capital per

tonne of capacity

• Strong

g Track k Recor

• rd

– Delivered over $2.4B in projects within 6% of budget – Returned a compounded annual gain of

• ver 30% since listing

4

2013 – A Transf nsform

• rmat

ativ ive e Year

 Succes cessful fully ly acquired red Inmet met Mining ing Corp rpora rati tion

• n

– Control of the Tier 1 Cobre Panama copper project – Added 3 well-run, low-cost operations  Restruc ructured tured financing ancing and nd capita ital l struc uctu ture re  Advan ance ced d projects ects unde der r developm

• pmen

ent  Record produc uction tion at Flags gshi hip Ka Kansans sanshi hi mine; e; Guelb lb Moghre rein in; and nd Ravens enstho thorpe pe

5

Cobre re Pa Panama ama – A Tier er 1 C Copper er Project ject

• Acquired March 2013
• Critical review following acquisition

– Focused mainly on Engineering, Contracts and Construction initially – Copied major areas of the design of the almost-complete Sentinel process plant

• Made significant changes

– Unwound ~US$1.7B of commitments – Rectified multiple deficiencies – Readied the site for construction – Connected minesite to portsite – Changed to an in-house, self-perform arrangement

6

Cobre re Pa Panama ama – A Tier er 1 C Copper er Project ject

• A larger, more robust project

– Installed capacity Yrs 1-10 = ~70 Mtpa

• 17% higher than prior
• Expansion up to 100 Mtpa beyond

Yr 10

– Average annual LOM* copper production

• f 320,000 tonnes
• ~ 20% higher than prior

– Average annual LOM by-product production

• 100,000 ounces gold; 1,800,000 ounces

silver and 3,500 tonnes molybdenum

• Mine life of 34 years

* On the basis of the current Resource estimate and the planned installed capacity of about 70 Mtpa

7

Cobre re Pa Panama ama – A Tier er 1 C Copper er Project ject

• Capex estimate of $6.4 billion

– inclusive of $913 million incurred prior to acquisition

• Capital per installed tonne of capacity of

$17,125 – ~25% lower than prior

• A realistic and well-defined timeframe

– 230 KV overland power line – Q4 ’15 – 300 MW powerstation – Q1 ‘17 – Tailings management facility – Q2 ’17 – Process plant construction – Q3 ‘17 – Commissioning & 1st concentrate production – Q4 ‘17

8

COBR BRE E PANAM AMA A PROJECT JECT – PROCESS CESS PLANT NT SITE TE EART RTHWORK ORKS

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COBR BRE E PANAM AMA A PROJECT JECT – MILL PAD EARTHW THWORK ORKS

10 10

COBR BRE E PANAM AMA A PROJECT JECT – PROCESS CESS PLANT NT STOCKP OCKPIL ILE E PAD

11 11

COBR BRE E PANAM AMA A PROJECT JECT – POWER WER STATION TION AREA EA

12 12

COBR BRE E PANAM AMA A PROJECT JECT – BREA EAKW KWATER TER AND MATERIAL RIAL OFFLOAD ADIN ING G FACILIT ILITY

13 13

Optimiz imizing ing Capit ital al Structu ructure re & F Financ ancial ial Flexibility xibility

• Refinancing the short-term US$2.5B revolver at FQM (Akubra) with a five-year Term and

Revolving Credit Facility

• Changing the FQM (Akubra) Inc. US$1.49B 8.75% 2020 and US$500M 7.50% 2021 notes

into new 6.75% 6-year notes and new 7.00% 7-year notes

• In conjunction with the Exchange Offer, seeking covenant changes from the existing

indentures to better match the Company's needs going forward

• Making certain amendments to the existing indentures of the US$350M 7.25% Senior Notes

due 2019 through a consent solicitation offer to bondholders

• Retiring the project financing at Kevitsa and Kansanshi and putting in place a $350M

unsecured facility at Kansanshi

14 14

• LTM Sep-13 EBITDA: US$1.1 Bn
• Total Debt / Total Leverage: US$0.8 Bn / 0.7x
• Total Assets: US$8.2 Bn

100% FQM Finance Ltd. 100% 80% US$1.0 Bn senior secured term and revolving facility

Kansanshi (Zambia) Guelb Moghrein (Mauritania)

100% FQM Australia Holdings (BVI) Ltd.

Ravensthorpe (Australia)

100% 100% FQM Scandinavia Ltd.

Kevitsa (Finland)

100% 100% Kiwara Resources Ltd.

Enterprise (Zambia)

100%

Sentinel (Zambia)

100% FQM (Peru) Ltd.

Haquira (Peru)

100%

Curren rrent t Corporat rporate e Structu ructure re Chart t

FQM (Aku kubra bra) Inc. .

• LTM Sep-13 EBITDA: US$0.5 Bn
• Total Debt / Total Leverage: US$2.5 Bn / 4.4x
• Total Assets: US$6.9 Bn

100% 100% 100% 100% 80% US$350 MM Senior Notes 100% US$2.0 Bn Senior Notes US$2.5 Bn RCF Represents Operating Company Guarantors of the FQM notes (1)

Las Cruces (Spain) Pyhäsalmi (Finland) Çayeli (Turkey)

(Figures as of 30 September 2013) US$215m Kevitsa facility Cobre

• bre

Panama (Panama)

Restricted Group

Cobre Panama is an unrestricted sub of FQM (Akubra) but a restricted sub of FQM 100%

Metal Corp Trading AG

US$110m short term facility

(1) Subordinated guarantees. Guarantor coverage ratio of 16% revenue and 8% EBITDA.

Represents Operating Company Guarantors of the FQM (Akubra) notes

15 15

(1) Assuming all notes exchanged before early redemption date (2) Senior guarantees to be provided for the Credit Facility, the FQM Senior Notes and the New Senior Notes – all on a pari passu basis. Guarantor coverage ratio of 52% revenue and 44% EBITDA

100%

FQM Finance Ltd.

100% 80% Kansanshi (Zambia) Guelb Moghrein (Mauritania) 100%

FQM Australia Holdings (BVI) Ltd.

Ravensthorpe (Australia) 100% 100%

FQM Scandinavia Ltd.

Kevitsa (Finland) 100% 100%

Kiwara Resources Ltd.

Enterprise (Zambia) 100% Sentinel (Zambia) 100%

FQM (Peru) Ltd.

Haquira (Peru) 100%

Pro Forma rma Corporat rporate e Struct ructure ure Char art t

Çayeli Bakir Isletmeleri A.S.

100% Çayeli (Turkey) Las Cruces (Spain) Pyhäsalmi (Finland) 80% 100% 100% 100% US$2.28 Bn (1) New Senior Notes US$350m Senior Notes US$2.5 Bn 5 year Term and RCF 100% Represents Operating Company Guarantors (2)

Minera Panama SA

Cobre

• bre

Panama (Panama)

• LTM Sept-13 EBITDA: US$1.6 Bn
• Total Debt / Total Leverage: US$3.5 Bn / 2.1x
• Total Assets: $15.0 Bn

Cobre Las Cruces S.A. Pyhäsalmi Mine Oy

100% 100% (Figures as of 30 September 2013)

Metal Corp Trading AG

US$110m Short term facility 100% US$350m unsecured term facility

16 16

Advanced ed Projects jects Copper Smelter, Zambia

• Processing capacity of 1.2 Mtpa

—Combination of concentrate from Kansanshi & Sentinel —Average copper grade 26%

• Copper production 300,000 Tpa;

acid production 1.0 Mtpa

• Estimates:

− Capital cost of US$690M − Commissioning from mid-2014

• Estimated savings:

− US$340M - US$510M/year

• Expansion being planned to increase processing capacity to 2 Mtpa in 2017

17 17

Advanced ed Projects jects Sentinel Cu project, Zambia

• Located ~ 140 km northwest of

Solwezi, northern Zambia

• M&I resource of 1,027 Mt at 0.51% Cu

grade, containing 5.2 Mt Cu

• Estimates:

– 2.2:1 LOM strip ratio – >15 years mine life – Annual production up to 300,000 tonnes – US$2.0B capex (incl. Enterprise nickel project) – Completion targeted for mid-2014

• Includes 4 Mtpa nickel facility; flexibility

to augment copper capacity

18 18

Sentinel Cu project, Zambia

• 55 Mtpa target throughput
• 3 semi-mobile in pit crushers and assembly
• f large scale mining equipment
• Largest operating SAG/Ball mill trains in

the world (100MW milling power)

• 265,000t of freight = 14,500 truckloads
• f materials
• 2 rivers to be dammed/diverted
• Life of mine TSF
• 600 km of 330kV power transmission lines from

Lumwana – Kalumbila – Lusaka West

• 690 staff houses plus 590 houses in resettlement
• Development of a new town, airport, clinic, school etc….

Advanced ed Projects jects

19 19

Advanced ed Projects jects – Senti tine nel l 100MW Milling ling – 2 x 40’SAG Mills + 2 x 28’Ball Mills

20 20

SPORTS FACILITY 04-NOV-2013 TRIDENT PREPARATORY SCHOOL 05-NOV-2013 SENIOR HOUSING - SINGLES 31-MAR-2013 SENIOR HOUSING AREA 28-FEB-2013

Advanc nced ed Projects jects – Sent ntine inel l Seni nior

• r Housin

using g

21 21

TRUST SCHOOL 05-NOV-2013 AFFORDABLE HOUSING LAYOUT TEACHER’S HOME 3-JAN-2014 COMPLETED 4-BEDROOM HOUSE 3-JAN-2014

Advanced ed Projects jects – Senti tine nel l Affordable able Housing sing

22 22

High gh-Qua Quali lity ty, , Stable able Operat rations ions Kansanshi Cu-Au mine, Zambia

• Located near Solwezi in the north

western Province of Zambia

• First production in 2005
• Open pit mining
• Flexible ore treatment to allow for

variation in ore type : – sulphide circuit; oxide circuit; gold facility

• As at December 31, 2012, the

estimated mine life was ~17 years

• Workforce = ~1,900

23 23

High gh-Qua Quali lity ty, , Stable able Operat rations ions Kansanshi Cu-Au mine, Zambia

• 2013 record production reflects capacity

expansion

– 270,724 tonnes of copper – 167,395 ounces of gold – C1 cash cost of $1.38/lb copper

• Multi-phase capacity expansion

project underway

– 2012 – 2015

60% increase in overall production capacity – 2012 – 2014 130% increase in oxide production capacity – 2014 - 2017 90% increase in sulphide production capacity

Expan ansion sion Proj

• jec

ect Capac acit ity Comple letio ion Estima imate e Cost st Productio

• duction

Impa mpact

(US$M) S$M)

Oxide

7.2 Mtpa Complete 34 Copper: 10,000 - 15,000 Tpa

Oxide

14.5 Mtpa Complete 268 Copper: 60,000 - 75,000 Tpa

Smelter

1.2 Mtpa 2014 690 Smelter Acid – 1.0 Mtpa

Sulphide

25 Mtpa 2017 565 Copper: 60,000 - 70,000 Tpa

24 24

High gh-Qua Quali lity ty, , Stable able Operat rations ions Guelb Moghrein Cu-Au mine, Mauritania

• 100% ownership
• Located 250 kilometres northeast of

the nation’s capital, Nouakchott

• As at December 31, 2012, the

estimated mine life was ~ 9 years (including stockpiles) based on current

• perations
• First production in 2006
• Workforce = ~1,170

25 25

High gh-Qua Quali lity ty, , Stable able Operat rations ions Guelb Moghrein Cu-Au mine, Mauritania

• Record production in 2013

– 37,970 tonnes of copper – 58,191 ounces of gold – C1 cash cost of $1.58/lb copper

• Focused on improving plant availability
• IOCG type deposit - structure and mineralogy

has common features with other IOCG deposits elsewhere in the world

• Magnetite plant project:

– In detailed design stage – Estimated capex of $50M – Expected annual production of 1M - 2M tonnes

• f 69% Fe magnetite concentrate

– Expected start up in mid-2014 – Expected to extend mine life through retreatment of tailings dam

26 26

High gh-Qua Quali lity ty, , Stable able Operat rations ions Ravensthorpe Ni mine, Australia

• Acquired as a decommissioned plant

in 2010

• First production within 20 months
• f purchase
• Estimated mine life of 32 years
• Commercial production declared

Dec 2011

• Workforce = ~428
• Record performance in 2013

– 38,103 tonnes of contained nickel – C1 cash cost of US$4.99/payable lb

27 27

High gh-Qua Quali lity ty, , Stable able Operat rations ions Kevitsa Ni-Cu-PGE mine, Finland

• Built, commissioned and started

commercial operations within 36 months of board approval

• Estimated mine life of 29 years
• Commercial production declared

August 2012

• Workforce = ~337
• Further potential

– Process optimization – Approval to increase throughput to a maximum of 10 Mtpa from 5.5 Mtpa – Public hearings & inspections held in September; decision expected within 6 months

28 28

High gh-Qua Quali lity ty, , Stable able Operat rations ions Las Cruces Cu mine, Spain

• Acquired in March 2013
• Estimated mine life of 9 years;

potential for extension

• Current average reserve grade of

5.4% copper

• Workforce = ~240 direct employees;

574 contractors

• Annual production capacity – 72,000

tonnes of copper cathode

• 2013 cash cost of US$1.14/lb

29 29

High gh-Qua Quali lity ty, , Stable able Operat rations ions Çayeli Cu-Zn mine, Turkey

• Acquired in March 2013
• Estimated mine life of 6 years with

potential for an additional 3 years

• Average grade of 3.1% copper and

3.6% zinc

• Workforce = ~472 employees
• 2013 performance:

– 31,510 tonnes of copper – 43,097 tonnes of zinc – C1 cash cost of US$0.76/lb copper

30 30

High gh-Qua Quali lity ty, , Stable able Operat rations ions Pyhäsalmi Cu-Zn mine, Finland

• Acquired in March 2013
• One of the most efficient underground

mines in the world

• Estimated mine life of 6 years
• Average grade of 1.1% copper and 1.9% zinc
• Workforce = ~203 employees
• 2013 Performance:

– 14,854 tonnes of copper – 21,679 tonnes of zinc – 825,821 tonnes pyrite – C1 cash cost of US$0.14/lb copper

31 31

Strong

• ng 2013 R

Results sults

• Producti

ction

• n up
• Copper up 34% to 412,281 tonnes
• Nickel up 28% to 47,066 tonnes
• Gold up 23% to 248,078 ounces
• Cash

sh cost t lowered ed

• Copper lowered by 13% to $1.30/lb
• Nickel lowered by 15% to $5.02/lb
• Compa

parati rative e net et earn rnings ngs of

• f $539.4

.4M M or $ r $0.96 per r share re, inclusive of:

• $69M or $0.12 per share of unfavorable, recurring acquisition-related adjustments
• Unfavorable impact of $313.0M due to lower metal prices

Copper Production

000’s tonnes

Nickel Production

000’s tonnes

Gold Production

000’s ounces

Copper C1 Cost

US$/lb

266 307 412 2011 2012 2013 6 37 47 2011 2012 2013 175 201 248 2011 2012 2013 1.41 1.49 1.30 2011 2012 2013

32 32

Full l Year r 2014 Guidanc ance

• Producti

ction

• n
• Copper between 418,000 and 444,000 tonnes
• Nickel between 42,000 and 47,000 tonnes
• Gold between 221,000 and 246,000 ounces
• Zinc between 59,000 and 65,000 tonnes
• Palladium and platinum between 22,000 and 24,000 ounces each
• C1 cash

h cost

• Copper between $1.32 and $1.48/lb.
• Nickel between $4.40 and $4.90/lb.
• Capit

ital al expen pendi ditu tures es

• $2.1B inclusive of approximately $600M at each of Cobre Panama and Sentinel

Februar ruary 2014